Estate Planning-Part One
Updated: Mar 17, 2021
Most people do not realize how important estate planning is and therefore, it is a task that is often overlooked or pushed aside till retirement age, or for when one obtains wealth. However, it is important that anyone with assets, including a home, or a savings account, should think about how exactly he/she wants those possessions to be distributed one day.
In this article I will discuss the inheritance law and wills in Israel. The next article will explore other estate planning options and considerations.
In Israel, if there is an absence of a will, the Inheritance Law (5725-1965), (hereinafter: “the Law”), determines the successors.
Here are just a few examples:
If the deceased was married and had children, grandchildren or parents (hereinafter "first degree heirs"), the surviving spouse is entitled to receive the tangible personal property, the family car, and half of the estate. The other half is distributed among the first-degree heirs.
If the deceased was married and was survived by his spouse and by siblings or their heirs, or by grandparents (hereinafter "second degree heirs") the surviving spouse is entitled to 2/3 of the estate. But, if the surviving spouse and the deceased were married for at least three years prior to the death, and they jointly lived in a property which is an asset of the estate, the surviving spouse is entitled to all of the rights of the deceased in that property and 2/3 of the remainder of the estate.
If the deceased was survived by his spouse alone, he/she inherits the full estate.
In the absence of any living relatives, the State of Israel inherits the estate.
If one does not want to divide his/her possessions according to the Law, it is imperative that he/she plan accordingly and prepare a will.
Writing a Will
By writing a will one can control what happens to his/her possessions when he/she is no longer among the living. This is one way to make sure one’s assets are passed on exactly as they wish.
According to the Law, there are four acceptable forms of wills:
A handwritten will made by the testator (the writer of the will) bearing a date and his signature.
A will signed and dated by the testator in the presence of two witnesses. The testator needs to declare before them that this is his will, to sign and date it. The witnesses need to confirm that the testator signed the will in their presence.
A will drafted before an authority. The authority may be a court registrar, a judge, a notary, an Inheritance Registrar, or a "Dayan" of an official rabbinical court. The testator appears before one of these and verbally expresses his will. The will is then written by the authority and read before the testator. The testator declares in writing that this is his will and the authority will then sign and confirm that the will was read before the testator and declared as above.
A deathbed will. If the testator believes he's facing death, he may verbally express his will, in front of two witnesses. The witnesses will then have to submit a memo of the instructions, together with the date it was instructed and the relevant circumstances, to the Inheritance Registrar as soon as possible. However, an oral will becomes void after a month if the circumstances that justified it no longer exist and the testator is still alive.
In addition, there are a few important things one should think of when drafting a will:
It is important to make sure to include or to take into consideration, the following details:
A detailed list of all the money and/or assets one has, including saving and pension accounts. Even if this information is not stated specifically in the will, it should be in a safe place that is known to the beneficiaries;
If there are specific items one wants to bequeath, they should be mentioned as accurately and clearly as possible. Occasionally, attaching a picture of the item, as an appendix to the will, can help and should be considered.
Who should be included (or excluded) in the will.
Who should be nominated as guardians for children until they reach the age of 18;
Sometimes, it may be necessary to nominate an executor for the will. The executor should be someone the testator trusts, and who is capable of sorting out the estate and making sure the will is carried out properly. The executor is granted power to administer the estate. This is likely to include collecting assets, paying off any debts and distributing the benefits to those entitled. Careful consideration is required when appointing the executor. It is recommended to receive the consent of the person one wants to appoint as an executor prior to appointing him as such in the will. Executors may be a solicitor, accountant, a public trustee, or one or all the beneficiaries themselves.
Insurance policies and other financial instruments which have designated beneficiaries will generally pass to the beneficiaries as stated in those documents.
The Israeli law allows for writing a will in English. In fact, according to the Law, English has an advantage over other languages and a notarized translation into Hebrew is not needed. Please note that the court and the registrar dealing with the application have the authority to request such a translation.
In a situation where there are assets in Israel as well as abroad, it is recommended to prepare a separate will for each country, making sure the laws and regulations of each one are applied. Probating the two wills will be much simpler that way since they will be executed in accordance with the laws of each relevant jurisdiction.
A mutual will is a will that spouses draft in order to bequeath their estate to one another and then to third parties, or when they both will their estate directly to third parties.
For example, a couple may make a mutual will, in which they state that in the event one of them passes away before the other, their entire estate will be transferred to the surviving spouse and upon both of their deaths, their joint children will inherit their estate. On the other hand, a couple may decide to prepare a mutual will in which they both decide to bequeath their entire estate, directly to their children. A mutual will limits the possibility of one spouse changing the will, without the knowledge of the other spouse.
Preparing a will is even more important when the couple has been previously married, and this is their second marriage. This is especially significant when there are no mutual children involved, and both sides have assets that they would like to transfer to their own children. In that case a mutual will is not relevant.
In the next article I will explore further estate planning options and focus on testators with dual citizenship (Israeli and American), and how this can affect their estate planning.
The content of this article is intended to provide a general guide to the subject matter and is not a substitute for legal consultation. Specific legal advice should be sought in accordance with the particular circumstances.